ASIC boss slams banks' fightback against regulation

The head of the corporate watchdog has slammed the attitude of some senior bankers who have warned against strict new regulation, in a fresh sign the sector has not taken the Hayne royal commission seriously.

Australian Securities and Investments Commission (ASIC) chairman James Shipton said some anonymous comments by senior bankers in the press had been counterproductive and implied the regulator was on a "frolic".

James Shipton did not hold back about the banking sector on Thursday. Credit:Eamon Gallagher

"Some of the anonymous comments by senior bankers in the press have been counterproductive and are not helping in the slightest trying to change the narrative. What they’re doing is focusing on rogue regulators going off on a frolic," he told an Australian Competition and Consumer Commission conference on Thursday.

"It’s not a frolic."

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Senior bankers, who have declined to be named, have been quick to warn about the impact of a range of recommendations from the Hayne royal commission.

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A key line coming out of banking sources in recent weeks has been that it will stop the availability of credit to small businesses as well as to home loan borrowers.

Banking sources The Age and Sydney Morning Herald have spoken to have also warned about the impact of tough new self-reporting laws and harsher penalties, saying it would encourage banking staff not to tell the regulator of their issues.

This week, ASIC slammed the big four banks, Macquarie and AMP over their slowness to compensate customers who were charged fees without receiving a service. The next day, anonymous banking sources told various press that ASIC's new focus on criminal charges would impact the credit market and hurt consumers.

Australian Banking Association head Anna Bligh first tried to play down the seniority of the sources, painting it as a middle manager issue when responding to Mr Shipton's comments at the conference.

But she quickly added that there might be a problem up the chain in some institutions.

Anna Bligh said there would be pockets of dissatisfaction within the middle manager ranks of the banks. Credit:Wolter Peeters

"I don’t doubt there are people at those senior levels who are saying those type of things," she said.

"This is disrupting their entire world. And this disruption has to happen, it’s not going to be comfortable, it’s not going to be easy, it’s not going to be quick.

"If any CEOs were telling me that they thought that everyone in their organisation was on board, I would think they are delusional."

David Locke, the CEO and chief ombudsman of the Australian Financial Complaints Authority, said some banks were trying to improve.

"But we’ve also got large financial institutions – both in banking, insurance and in other sectors – where even now at this point in time we’re not getting a satisfactory response," he said.